Dive Brief:

• TransWest Express has agreed to sell Power Company of Wyoming (PCW) 1,500 MW of capacity on a transmission line slated to run from Wyoming to southern Nevada, where power can reach California markets, according to a Friday filing at the Federal Energy Regulatory Commission.

• The agreement between the Anschutz Corp.'s affiliated subsidiaries is another milestone for the $3 billion transmission project that could provide the Southwest with low-cost wind energy, diversifying the West's power supplies and facilitating power markets, according to experts in the region. PCW is building a 3,000-MW wind farm in Wyoming.

• "If we have a larger, regional market in the West ... this transmission line could be a means or a backbone in providing additional capability to transfer energy," Vijay Satyal, Western Resource Advocates (WRA) regional energy markets manager, said.

Dive Insight:

The bi-directional TransWest Express project is slated to run from Sinclair, Wyoming, to the Eldorado substation in southern Nevada where the line could deliver about 1,500 MW to the California Independent System Operator system.

The project, which has been under development since 2005, includes a 3,000-MW, 500-kV direct current line from Wyoming to Delta, Utah, and 1,500-MW, 500-kV, alternating current line from the Utah terminal to south of Las Vegas.

An open season for capacity on the transmission project ended last month with PCW as the only eligible participant in the process, according to the filing at FERC. PCW is building the Chokecherry and Sierra Madre (CCSM) wind farm in south-central Wyoming, which has some of the best wind resources in the United States.

TransWest asked FERC to accept the solicitation results by Feb. 2 "to provide commercial certainty as soon as possible." TransWest plans to start building the transmission project in 2022 and bring it online in 2025. With all major permits in hand, the project is essentially shovel-ready, according to the company.

There is "significant market interest in the high volume of cost-competitive, geographically diverse, clean electricity that the CCSM project can provide," Kara Choquette, PCW and TransWest director of communications and government relations, said in an email Monday. The discussions are confidential, she said.

The project could provide multiple benefits, according to Ron Lehr, a consultant with Western Grid Group, an advocacy organization, and WRA's Satyal.

"This is a very valuable project that captures the resource diversity of the West," Satyal said. "It will be able to harness the wind energy resources in Wyoming and in the intermountain West and bring it down to the Southwest. It will also be able to move excess solar energy from Arizona and Nevada, which is home to a lot of solar rich resources, and potentially take it back up."

If built, the project would enhance the value proposition for a wholesale energy market in the West, according to Satyal. 

"One of the reasons why a wholesale energy market in the West has not been easily justified or easy to pencil out in benefits is that you have higher costs of transmission and energy delivery due to limited infrastructure," Satyal said. "A project like this would allow more capability and more flexibility for utilities to transact in an open organized market."

California would benefit from market development in the West, according to Lehr. 

"California gets access to all kinds of juicy resources around the region that are going to be at times, in different circumstances, more economic than what they can do for themselves," Lehr said, noting wind from Wyoming could be in the $10/MWh range.

However, one of the barriers to market expansion in the West and to PCW finding customers for its power is pressure from labor unions in California that want to limit out-of-state generation so they can build in-state facilities, according to Lehr.

Lehr said California would benefit from out-of-state projects.

"If you look forward at the mountain we have to climb to get enough clean energy to run the California economy, and the rest of the West, that means there's going to be lots of development in California and lots of jobs, but also lots of development elsewhere that feeds into California," Lehr said. "It has got to be a benefit to California to move that transition forward in the most effective way possible."

Pointing to the benefits of geographic diversity for California, Lehr said: "The wind in Wyoming fits right in, the right way, at the right time, with the right price. And we have the transmission. So we're going to take advantage of that."

Also, infrastructure development in California is difficult and expensive, according to Lehr.

"It's hard to site stuff if you're in the same place with 38 million people," Lehr said. "Every place is sacred to somebody.

Despite its potential benefits, the TransWest project, under development for about 18 years, also shows how hard it is to build interstate power lines in the West.